10b. Memo

Bldg 161E Renovation and Systems Retrofit

AGENDA MEMORANDUM                        Item No.          10b 
ACTION ITEM                            Date of Meeting    September 13, 2022 

DATE:     September 6, 2022 
TO:        Stephen P. Metruck, Executive Director 
FROM:    Laurel Dunphy, Director, Airport Operations 
Eileen Francisco, Director, AV Project Management Group 
SUBJECT:  Building 161E Renovation and Systems Retrofit (CIP C801179) 
Amount of this request:               $2,900,000 
Total estimated project cost:         $13,989,000 
Request Commission authorization for the Executive Director to (1) execute a professional
services contract for design services, and (2) complete design of the Building 161E Renovation
and Systems Retrofit project at the Seattle-Tacoma International Airport. This requested 
authorization amount is $2,900,000 for a total authorization of $3,098,000. 
Building 161E (formerly known as Cargo 4E) is an Air Cargo/Multiple-use Port-owned facility built
in 1981. This 25,600 square-foot facility serves multiple tenants, including Southwest Airlines
Cargo, Unifi/DGS, AVOPS Airport Wildlife, Western Extermination Services, Menzies Aviation and
Aerotek Aviation. This facility consists of approximately 10,000 square feet of warehouse space,
5,000 square feet of Ground Service Equipment (GSE) mechanical repair space, and 10,600
square feet of office space. In 2015, Building 161E reverted to Port ownership upon expiration
of a thirty (30) year ground lease. 
This project will renovate and retro-fit Building 161E with updated building mechanical systems,
lighting  systems,  and  fire  protection,  to  improve  operational  efficiency  and  facility
maintainability, and to continue receipt of lease revenue (approximately $507,000 per year
currently)  for  many  years  to  come.  This  project  will  utilize  project-specific  design  and
construction contracts and will be a model for three (3) other Port owned Air Cargo Facilities
currently requiring similar renovation. 
The building is becoming more difficult (and costly) to maintain and repair as most systems have
long exceeded their life cycle. On hot or cold days, the heating and air conditioning (HVAC) are

Template revised January 10, 2019.

             COMMISSION AGENDA – Action Item No. _10b_                               Page 2 of 5 
Meeting Date: September 13, 2022 
failing. Daily inspections and two studies on the facility were conducted (2019 Preliminary
Engineering Analysis Report and 2021 Air Cargo Fire Protection Study) which identified numerous
building system and building fire code deficiencies. As a result, Port staff proposed this project to
improve the building’s efficiency and life safety by implementing a series of improvements
outlined in the Details section below. 
In the absence of or delay of this project, there will be a need for continued high volume of
Aviation Maintenance repair calls and expenditures, or in the worst case the building may be
partially or completely closed due to code compliance failure. Additionally, the risk of HVAC
failures will increase, and high energy use will continue with resulting elevated carbon emissions
and costs to the Port and its tenants. 
Diversity in Contracting 
Project team is working with the Diversity in Contracting Department to establish WMBE
aspirational goal for the design contract for this project.
This building is currently occupied by multiple tenants and is serving multiple needs in an airport
environment with limited land use options. The anchor airline cargo tenant transported over
4,900 metric tons through the facility in 2021 (10.2% increase over 2019); a testament to the
resilience of the air cargo supply chain during the COVID-19 global health emergency. Another
tenant provides maintenance and repair to airfield vehicles from a specialized auto shop. Moving
tenants to other facilities is infeasible as such facilities either do not exist or are at full capacity.
Therefore, this building will need to remain open and operational during construction.
Construction will need to be phased and will take longer. Thorough communication between
project stakeholders, building tenants, and contractors will be required. 
Scope of Work 
(1) Building upgrades include: 
a.  Installing modernized heating/cooling and life-safety system with Direct Digital
Control (DDC) controls; LED lighting. 
b.  Decommissioning unused sauna and showers, replacing water fountains,
restroom fixtures and unhygienic surfaces. 
c.   Replacing inefficient windows and doors 
d.  Installing and establishing demarcation of gas and electrical utilities 
(2) Fire protection upgrades include: 
a.  Upgrading fire alarm 
b.  Improving sprinkler and water supply 
c.   Improving emergency lighting and exit signage 

Template revised June 27, 2019 (Diversity in Contracting).

             COMMISSION AGENDA – Action Item No. _10b_                               Page 3 of 5 
Meeting Date: September 13, 2022 
This project will be a model for three (3) other currently Port-owned Air Cargo Facilities requiring
renovation and retrofit based on the Preliminary Engineering Analysis Report of December 2019
and the Air Cargo Facilities Fire Protection Study 2021, along with one other building scheduled
to return to the Port in 2024. To maximize efficiency, the Port will solicit, with this authorization,
a procurement for design services scoped and sized for up to five of these projects. Separate 
requests for design authorization would be forthcoming in the future to fund that work. 
Design start                                                              2023 Q2 
Commission construction authorization                              2024 Q3 
Construction start                                                      2024 Q4 
In-use date                                                             2025 Q3 
Cost Breakdown                                     This Request           Total Project 
Design                                                  $2,900,000             $3,098,000 
Construction                                                      0            $10,891,000 
Total                                                         $2,900,000             $13,989,000 
Alternative 1 – Do not proceed with capital improvements to the building. Continue repairs and
maintenance as necessary to keep the building functional and occupiable. 
Cost Implications: $0 capital, with ongoing annual repair costs. 
(1) No capital investment. 
(2) Capital resources could be devoted to other projects. 
(1) Expenses would continue to be incurred on emergency repairs and maintenance. 
(2) The building will continue in a code deficient state. 
(3) The risk that the building will eventually fall into disuse, or be shuttered due to code
deficiencies, will increase. This would result in tenants being dislocated off the airfield. Lease
revenue stream from this building would diminish or cease. 
(4) The risk to occupant safety due to failing HVAC systems and non-compliant fire protection 
could increase. 
This is not the recommended alternative. 
Alternative 2 – Proceed with the project but include additional features. 
Cost Implications: $16,700,000 

Template revised June 27, 2019 (Diversity in Contracting).

             COMMISSION AGENDA – Action Item No. _10b_                               Page 4 of 5 
Meeting Date: September 13, 2022 
(1) Includes all scope items necessary to renovate the building and ensure its future code
(2) Includes additional scope items recommended by a consultant-performed Energy Efficiency
Study (Air Cargo Buildings Preliminary Engineering Analysis Report, 12/20/2019) including
installation of photovoltaic (PV) solar panels and up to 5 electric vehicle (EV) charging
(1) Most expensive alternative. 
(2) Financial analysis indicates a less than desirable effect on business performance, that is, a
negative net present value, along with an extended period of negative cash-flow after debt
service, based on the project capital cost noted in this alternative. 
This is not the recommended alternative. 
Alternative 3 – Upgrade Building 161E to meet code requirements and ensure its viability. 
Cost Implications: $13,989,000 
(1) Includes scope items necessary to ensure future code compliance. 
(2) Less expensive than Alternative 2. 
(3) Balances the building improvements with fiscal responsibility and the need for a reasonable
return on investment. 
(1) Does not include scope items intended to achieve energy efficiency gains detailed in the
2019 Energy Efficiency Study including PV solar panels and EV charging stations 
This is the recommended alternative. 
Cost Estimate/Authorization Summary              Capital        Expense           Total 
Original estimate                                $10,556,000               $0     $10,556,000 
Current change                                $3,433,000               0      $3,433,000 
Revised estimate                              $13,989,000               0    $13,989,000 
Previous authorizations                            $198,000                0        $198,000 
Current request for authorization                $2,900,000                0      $2,900,000 
Total authorizations, including this request       $3,098,000                0      $3,098,000 
Remaining amount to be authorized           $10,891,000             $0    $10,891,000 

Template revised June 27, 2019 (Diversity in Contracting).

             COMMISSION AGENDA – Action Item No. _10b_                               Page 5 of 5 
Meeting Date: September 13, 2022 

Annual Budget Status and Source of Funds 
This project, CIP C801179, was included in the 2022-2026 capital budget and plan of finance with
a budget of $10,556,000. A budget increase of $3,433,000 was transferred from the Aeronautical
Reserve CIP (C800753) resulting in zero net change to the Aviation capital budget. The funding
source will be revenue bonds and Airport Development Fund (ADF). 
Financial Analysis and Summary 
Project cost for analysis              $13,989,000 
Business Unit (BU)                  Airfield Commercial Cargo 
Effect on business performance     NOI after depreciation will decrease 
(NOI after depreciation) 
IRR/NPV (if relevant)                NPV $805,000 
NOI after debt service will be negative between ($787K
and $25K) during 2026-2041. 
NOI after debt service becomes positive in year 18
CPE Impact                       N/A 
Future Revenues and Expenses (Total cost of ownership) 
As a result of this project, Aviation Maintenance may see a small increase in preventative
maintenance support, and a significant reduction in repairs due the renovation  of new
(1)   Presentation slides 

Template revised June 27, 2019 (Diversity in Contracting).


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